Marissa Mayer's challenge as Yahoo CEO

ANALYSIS Yahoo's leader has the credentials - can she succeed where others failed?

Marissa Mayer arrives at War Memorial Opera House wearing a gown custom designed by Sarah Burton for Alexander McQueen to attend the San Francisco Opera Opening Night Gala in San Francisco, Calif., on Friday, September 9, 2011.

Marissa Mayer arrives at War Memorial Opera House wearing a gown custom designed by Sarah Burton for Alexander McQueen to attend the San Francisco Opera Opening Night Gala in San Francisco, Calif., on Friday,

Marissa Mayer arrives at War Memorial Opera House wearing a gown custom designed by Sarah Burton for Alexander McQueen to attend the San Francisco Opera Opening Night Gala in San Francisco, Calif., on Friday, September 9, 2011.

Marissa Mayer arrives at War Memorial Opera House wearing a gown custom designed by Sarah Burton for Alexander McQueen to attend the San Francisco Opera Opening Night Gala in San Francisco, Calif., on Friday,

Google executive Marissa Mayer enters the revolving door that is the top slot at Yahoo on Tuesday, staking her sterling reputation on the long odds of turning around the struggling Internet pioneer.

It's a high-risk, high-reward move for Mayer, who was among the earliest employees at Google and most recently led the company's local and maps division. If she can successfully reinvigorate Yahoo, a task that many short-lived CEOs have failed spectacularly at completing, it would cement her spot among the pantheon of celebrated technology leaders.

"If she's able to pull it off, she will go down in history, almost to the extent to which Steve Jobs did with Apple," said Allen Weiner, an analyst at Gartner. "I think it's a really good choice."

Yahoo surprised the tech world Monday by appointing Mayer, 37, as the Sunnyvale firm's seventh permanent or interim chief in five years. She helped announce the news herself in a succinct post to both her Google+ and Twitter accounts shortly after the stock market closed.

"I'm incredibly excited to start my new role at Yahoo tomorrow," Mayer wrote.

Ross Levinsohn, who took over the interim role in May after the abrupt departure of Scott Thompson over a resume exaggeration, appeared to have the inside track after he negotiated a settlement of patent infringement lawsuits with Facebook this month.

Yet Yahoo's board gave the job to a rival's respected vice president, a highly visible tech executive who may have enough star power to refocus the spotlight on a company languishing in the shadows of Internet powerhouses Google and Facebook.

While a Google executive, Mayer has been a high-profile presence on business TV shows and at San Francisco social events. She has also been a player in political circles. In October 2010, she and her husband hosted President Obama at a pricey fundraising dinner at their Palo Alto home. On top of her new job, she is expecting her first child in October.

"Marissa Mayer has always attracted a great deal of attention and, to date, it's all been positive," said Rebecca Lieb, digital advertising analyst with the Altimeter Group, a business research firm in San Mateo.

Miracle worker?

So what does Mayer have to do at Yahoo?

"Work miracles," said Carl Howe, analyst with information technology specialists the Yankee Group, with a laugh. "But to be fair, she's one of those people who could do that."

Specifically, she needs to establish a clear vision for what Yahoo should be, and then make it happen, he said. The ripest area for rebuilding is mobile, creating apps and content that will engage audiences on phones and tablets.

Howe also stressed that the move is a blow to Google, noting that Mayer turned each of the product areas she focused on into gold mines, from search to maps. In recent years, she's accomplished more at Google than the company's two founders have, Howe argued.

"She's the person who gets things done," he said.

Mayer's departure may be a blow to Google in another way.

"A lot of people would fall over themselves to work for Mayer who otherwise might not fall over themselves to work for Yahoo," Lieb said.

Praise from Schmidt

"I worked with Marissa for many years," he said in a statement released by Google. "She's a great product person, very innovative and a real perfectionist who always wants the best for users. Yahoo has made a good choice and I am personally very excited to see another woman become CEO of a technology company."

Yahoo said Mayer's hiring "signals a renewed focus on product innovation." Exactly what that means won't be known until she hires her management team and settles into the job.

The Yahoo job also presents Mayer with a potentially higher perch to fall from, one subject to intense scrutiny from the press and investors. She follows in the footsteps of Terry Semel, Jerry Yang, Carol Bartz and Thompson, all of whom took public beatings during their unsuccessful tenures.

Surprise move

Mayer wasn't on the public short-list for the position. Indeed, many were surprised that anyone would leave a high-profile spot at Google for Yahoo. After all, it was the emergence of Google as an engine of online innovation that first tarnished Yahoo's status as the Internet darling during the last decade.

Yahoo has labored to regain its momentum ever since. While the company remains one of the most popular online destinations, it has largely failed to invent products that excited consumers or observers. As a result, ad revenue and user engagement have been shrinking.

Yahoo's stock closed Monday at $15.65 per share, a far cry from Microsoft's rejected bid to buy the company for $47.5 billion, or $33 per share, in 2008.

Some speculated that Mayer, who is roughly the same age Google co-founders Sergey Brin and Larry Page, simply concluded that she couldn't rise any further there.

But like any ambitious executive, Mayer probably was looking for a new challenge, especially after spending almost her entire career at Google.

"This is a challenge for anybody," Lieb said. "It's not every day that jobs like this open up, although that's happened at Yahoo more frequently than elsewhere."

"Her biggest personal strength at Yahoo will be her unwavering dedication to the simplest, cleanest, most crisply designed user interfaces on the Web," Lieb said. "Will she pare Yahoo down? Possibly. Will she look at acquisitions for Yahoo? Again, possibly."

Mayer graduated from Stanford University, with degrees in symbolic systems and computer science, specializing in artificial intelligence. She has also worked at theresearch lab of global financial firm UBS in Zurich, and at nonprofit research institute SRI Internationalin Menlo Park.

Baby on the way

Hours after her appointment was announced, she told Fortune magazine that she is expecting a boy in October. She said Yahoo directors did not reveal any trepidation about hiring a pregnant chief executive. "They showed their evolved thinking," she said.

Mayer was Google's first female engineer and held various posts, most recently vice president of the company's suite of local and geographical products like Google Maps, Google Earth, Street View and Zagat restaurant information service.

"Since arriving at Google just over 13 years ago as employee number 20, Marissa has been a tireless champion of our users," said a statement from Google CEO Page. "She contributed to the development of our Search, Geo, Local and other products. We will miss her talents at Google."

Fortune magazine ranked her as the 38th most powerful woman in business in 2011, although she is now sure to rise on that list this year.

"There's no reason to believe she's got a magic formula for Yahoo," said Greg Sterling, senior analyst at Opus Research. "She faces the same uphill battle to revive Yahoo (as previous CEOs). But in many ways she may be the most well-rounded of the group: tech savvy and ad savvy."